SECTOR FOCUS OF THE DAY
Automobile Sector : The start of summer NEUTRAL
October saw sales bouncing back on a MoM basis. TIV rose 15% MoM (Sep: -21% MoM) and most carmakers saw a double-digit MoM rebound with the exception of Nissan. TIV was lower 2% on a YoY basis. The growth of 1% for the YTD period similarly reflects tepid market conditions.
Three highlights from October: 1) Mazda breached the crucial 1K point for the first time in one year. Bermaz Auto (BAuto) launched the new CX-5 earlier in the month and priced the model cheaper than its immediate comparables. It also launched the 7-seater CX-9 last week; 2) Perodua buyers held back for two months in anticipation of the new Myvi. Early reception has been positive (5K in bookings as of mid-November; 3) Toyota is very slowly working its way back to health. While FY17 sales projection of 70K will have outdone its disastrous 2016 showing, the following year will be crucial as it aims to strengthen sales before the second local plant comes onboard in 2019.
We maintain NEUTRAL on the Automobile sector with BUYs on Bermaz Auto (BAuto) and Pecca Group, and HOLDs on DRB-Hicom, UMW Holdings, Tan Chong Motor Holdings, MBM Resources and APM Automotive.
QUICK TAKES
Plantation Sector (1) : News flow for week 13 – 17 November NEUTRAL
Plantation Sector (2) : India raises import duties again NEUTRAL
ECONOMIC HIGHLIGHTS
Malaysia : What 3Q2017 GDP figure implies
NEWS HIGHLIGHTS
Jaycorp : Expects great potential in Sabah’s construction sector
Ho Wah Genting : Another attempt to turn around
Kejuruteraan Asastera : Seeing potential in mechanical sector
S P Setia : To challenge RM75.38m income tax bill
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